Soundbeat

One way to look at the last week...

Musk and DOGE were (supposedly) saving us a billion here and a billion there.

Meanwhile Trump was vaporizing a THOUSAND BILLION every day.

And that's before we even start to calculate the damage to our reputation that's at the heart of what is upsetting the bond market.

On the bright side, the incompetence is now in full view. The first step in fixing something is understanding the cause. So, there's that at least.

@Geneva Investor exactly. Especially as we are now by far mostly a services economy. Trump is fixated on manufacturing when our economy has evolved past that.

Absolutely shocking to see articles like this published. Next one taking over Canada? No wonder the markets have lost $trillions with the craziness coming out of the US. The US will soon be left totally isolated in the world with only the Russians as friends. I’m in disbelief this was allowed to be published inciting take overs of other countries.

@buckiowa Not sure how tariffs don't cause inflation. Do you think China is writing a check to Trump to deposit into the Treasury?

@gss54 there may be fewer than expected takers for re-negotiated trade deals. Mind you, Trump I negotiated the trade deals with Canada and Mexico he just blew up. So the world moves on and looks for stability in predictability.

Lately, things seem to be getting more challenging for everyone to deal with. I figure the US has likely experienced a mild stagflation-like environment for the last 6-9 months or so. And given the way things currently look, there are potentially a couple of ways I can see us getting out of it.
One way would be if Trump ends the current tariff strategy and allows US economic growth to rev back up. Of course, that would likely drive inflation higher and perhaps result in even higher interest rates from the FED. In all likelihood, that in itself would trigger an economic slowdown or recession. The other way would be if Trump retains or ramps up tariffs and doubles down on the present strategy. That would likely reduce consumer spending as goods & services become more expensive. This approach could also induce a slowdown or recession, thus allowing the Fed to lower rates and reignite the markets, after a time.

Right now, the latter scenario appears to be the administration's preferred approach. Slow the economy and incentivize lower interest rates so as to make US debt easier to finance. Then, blame foreign trade partners for the US slowdown, renegotiate more favorable trade deals in exchange for tariff relief and ultimately rejuvenate economic growth and take all the credit for “saving” the US economy.

Thus, engineer a slowdown/recession, extract better terms from our trade partners and then rev up the economy with lower rates and lower inflation (perhaps even temporary deflation). Call me crazy, but this scenario may not be as far-fetched as many people would like to think.

@Soundbeat There’s no rush. NIST gives almost a decade for cutting over to quantum resistant encryption protocols. It’s the same technology securing the internet. Even quantum computing companies state that there is no immediate threat.

Blockchain developers are already looking at it, but there’s risk that those protocols have flaws too.

Encryption is always a race between better algorithms and better math techniques.

Bitcoin specifically is resistant in the sense that it could recover from a block prior to the attack. You would need to get consensus on which block and which encryption protocol to use, but as long as most of the network agrees, it picks up from where ever it left off with mathematical certainty that the longest chain is true.

Since the quantum attack would be stopped at that point, the shorter chain would be discarded erasing illicit transactions and the network would resume.

This is true for any attack.

@ransim7222 The richest country in history with a $30 trillion dollar economy is a victim? Please, grow up. Trump seems to believe that a trade policy is a zero sum game and unless the U.S. is winning on every part of the deal, America is getting ripped off. Pathetic woke thinking.

@ransim7222 right instead we should trust the Orange Cheeto who says that he and Putin “went through hell together” and blames Ukraine for being invaded… good logic

@chaptal Doge and tariffs are long term policies aiming at improving the US economy

The sweeping and indiscriminate cuts that Doge is making are not policy any more than cutting off my leg is a weight loss plan. Threatening long time friends like Canada is not policy, it is ego.

@Soundbeat Same, I am working to exit positions, sell cover calls, or hedge with puts.

Looking for international exposure, precious metals, and cash secured puts for cheap entry or returns on parked cash.

@BlueHorseShoes Capitalism is a cold bitchh. Capital will always seek it's best return. All those missing jobs are capital seeking better returns elsewhere. All those American companies followed the cheap labour to Asia or went BK and we all enjoyed several decades of high growth and low inflation due to China exporting deflation all over the world. Those days are over. The middle wasn't a victim of the coasts the middle just happened to have the most vulnerable industries. Your anger is misplaced, blame the free movement of money and American companies seeking better returns for shareholders..

@BlueHorseShoes the current "elites" in charge represent the prosperity you mention, it isn't a one sided problem. That inauguration said it all. Those billionaires have seen their wealth multiply in absurd ways, while the federal minimum wage stays at $7.25. I do get it, being born in Indiana, growing up in Michigan - but this administration is not really for the people, they are the afterbirth of reality TV, social media influence, bullying, and disinformation, all put into a blender..now we have to plug our noses and swallow.

great article and very relevant to our times...but does MAGA even know who Ronald Reagan was?

@Max1123456 Lately, very much so.

It's only 11 MARCH. The "dip" is hardly a blip. The market is extremely expensive. Let's enjoy the sell off for a few more months. There will be a buying opportunity. 😉

Good call. That is my 12 month S&P target with the administration hitting the markets with chaos and uncertainty. Both are not good news for businesses and investors. Expect unintended consequences. We decisively broke the DMA yesterday. Barely managing a dead cat bounce today. Not to mention the geopolitical risk in our policy realignment moves. Taiwan has to be doing the deer in the headlights look.

Already below 5,600. I had a support level of 5,700 and that went bye bye. Sitting tight and waiting for 5,400 now. Do not fall for one day recoveries. They are meaningless.

"S&P 500 support at 5,600; breaking this could lead to further declines, targeting a P/E ratio of 17.5."

You should have waited a few hours to write this article.

25% tariffs on Canada and Mexico will tank the market. Americans are in for a rude awakening on how much things would cost without the subsidized energy and cars that are 30% cheaper.

Not only that but both those countries are by far the biggest consumer of US exports (~60%), and with retailatory tariffs and avoidance of US products, there would be a recession. Canadian retailers putting up Made in Canada signs (turns out everything is made in china fyi) and they are talking new pipelines to move energy to foreign markets.